Selling relationships start as personal relationships. Making a personal connection is vital in the two to ten minutes of a customer encounter or meeting.^[12] Think about the last time you bought a new cell phone. Chances are, if the person didn’t establish rapport with you from the start, you probably walked away and bought the phone from a different salesperson, maybe even at a different store. The relationship includes a sincere bond that goes beyond business and includes common interests and goals.Tom Reilly, “Relationship Selling at Its Best,” Industrial Distribution 25, no. 9 (September 2006): 29. If you are selling medical imaging equipment to hospitals, you want to build relationships with the administrators, doctors, and nurses who will be using your equipment in each hospital. When you build a relationship starting with what’s important to each person individually, it’s easier to expand that relationship to sharing information and problem solving from a business perspective. As Bob Fitta, a manufacturer’s rep for several tool companies said about Paul Robichaud, owner of Robi Tools, “I got to know him as a business person and a real person, and that relationship has endured.”Brad Perriello, “Relationship—Selling at its Best,” Industrial Distribution 97, no. 9 (September 2008): 34.

But consultative selling is more than simply building rapport. In fact, consultative selling goes beyond the product or service you are selling; it even goes beyond the selling process. It is the “X factor,” the intangible element that makes a customer choose your product or service even when the competition is priced lower. Consultative selling is about your personal involvement and sincere focus on problem solving that goes beyond selling to true partnership with the customer.

Consultative selling doesn’t start and stop at specific times during the relationship. In fact, it defines the relationship before the sale, during the sale, and after the sale.Cathy Berch, “Don’t Wing It,” Community Banker 18, no. 2 (February 2009): 18. You will learn about the seven steps of the selling process in Chapter 7 “Prospecting and Qualifying: The Power to Identify Your Customers” through Chapter 13 “Follow-Up: The Power of Providing Service That Sells” and how building long-term relationships and consultative selling are the basis of each step. The concept of building professional relationships is apparent in this example: If you are selling insurance, consider the fact that your customer may eventually buy a home, have a family, or purchase a second property. So the relationship you develop when you sell him car insurance as a young single man could and should be nurtured and developed over time to provide solutions that answer his needs as his lifestyle changes. Having this long-term view of customer relationships is called focusing on lifetime value. It means that you consider not just one transaction with a customer, but also the help and insight you can provide throughout the entire time frame during which you do business with him. So, although you may only provide him with basic car insurance now, over the course of more than twenty-five years that you do business with him, you may ultimately sell him thousands of dollars of insurance and investment products that meet his changing needs. But that won’t happen if you don’t continue your relationship and keep in touch, focusing on topics and events that are important to him. If you focus only on the immediate sale, you will miss a lot of business, not to mention future referrals.

There are several elements that can be included in the calculation of the lifetime value of a customer. However, a simple formula is

dollar value of purchase × gross profit percent × number of purchases.

For example, if a customer shopped at a retailer and spent $75 on one purchase that had a gross profit of 30 percent, the lifetime value of that customer would be $22.50, calculated as

$75 × 30% × 1 = $22.50.

If the customer made five purchases for $75 each over the course of the time she shopped with the retailer (let’s say five years), at a gross profit of 30 percent, the lifetime value of the customer would be $112.50, calculated as

$75 × 30% × 5 = $112.50.^[13]

So you can see that the concept of retaining a customer for more than one purchase can provide financial benefits. In addition, working with the same customer over the course of time provides an opportunity to learn more about the customer’s needs and provide solutions that better meet those needs.